Chattanooga Mall Operator, CBL, Mediates Bankruptcy Case

Mall owner CBL & Associates Properties Inc., which filed for bankruptcy last year, agreed to try to settle a dispute with a bank over $ 1.1 billion in loans to the ‘business.

Chattanooga-based CBL was scheduled to hold a premediation conference with the Wells Fargo Bank, National Association on Thursday and will hold further discussions and potentially avoid a lawsuit that was due to start next week.

Since the order was placed earlier in the week, CBL shares traded over-the-counter over the past two days have risen by more than 23%. On Thursday, CBL stock closed at 0.0567 cents per share.

CBL, one of the largest mall owners in the country, alleged that Wells Fargo, acting as an agent for some of its lenders, forced the company to file for bankruptcy on an accelerated deadline last November and that the bank falsely claimed that CBL defaulted on its debt. .

CBL said in court documents that Wells Fargo attempted to exercise control over some of the operator’s properties, including the Northgate Mall in Hixson. Some 22 CBL properties were used as collateral for a line of credit that lenders extended to CBL in early 2019.

CBL said Wells Fargo sent nearly 400 letters to more than 200 tenants at the properties late last year, asking them to start paying rent to Wells Fargo rather than CBL.

“Wells Fargo’s illegal conduct has created chaos and confusion for CBL tenants and has forced CBL to file for bankruptcy within an accelerated timeframe and threatens to jeopardize the success” of the company’s Chapter 11 reorganization, according to the complaint.

But Wells Fargo in court documents denied any wrongdoing. CBL said it takes the rents and separates them until the dispute is heard in court.

United States Bankruptcy Court Judge David R. Jones said this week in an order that CBL, Wells Fargo and others “agree that mediation can be an effective and efficient mechanism to resolve consensually. all matters relating to these cases falling under Chapter 11 ”.

The judge said another South Texas District Bankruptcy Court judge, Marvin Isgur, would mediate. The order said the non-binding mediation would end when determined by Judge Isgur or on January 21, unless the parties agree to an extension.

“Judge Isgur has absolute discretion as to the timing, means and methods of any mediation,” the order said.

CBL filed for bankruptcy after the company was hit by the coronavirus pandemic as well as the shift of many shoppers to online retailers.

Still, the longtime company has said its centers will remain open and “as usual” as it reworks its massive indebtedness in bankruptcy court. Court documents said the company had a total debt of $ 2.58 billion.

In Chattanooga, the company operates Hamilton Place and Northgate shopping centers as well as nearby shopping centers. CBL’s portfolio includes 107 properties totaling 66.7 million square feet in 26 states.

CBL has said he hopes to exit Chapter 11 as soon as possible in 2021.

CBL chief executive officer Stephen Lebovitz said last month that the company is considering more single-user rentals this year.

Lebovitz said CBL has seen a recovery in some industries that have performed well during the pandemic, such as furniture, food-related businesses, wholesale clubs and supermarkets.

“We’ve had a lot of interest in old anchor locations for these kinds of uses, including home-related categories,” he said.

Contact Mike Pare at [email protected] Follow him on Twitter @MikePareTFP.

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